TIDMPOW
RNS Number : 7735Q
Power Metal Resources PLC
29 October 2021
29 October 2021
Power Metal Resources plc
("Power Metal" or the "Company")
Power Metal Acquires 100% of FDR Australia
Power Metal Signs Revised Agreement to Acquire 100% Ownership of
First Development Resources Australia with Exploration Interests in
the Paterson Region of Western Australia
Power Metal Resources plc (LON:POW), the London listed
exploration company seeking large-scale metal discoveries across
its global project portfolio, announces it has today signed a
revised agreement ("Agreement") for the 100% acquisition of First
Development Resources Pty Ltd (FDR Australia). This Agreement is
unconditional and binding.
HIGHLIGHTS
About FDR Australia
- FDR Australia holds exploration interests in the prolific
Paterson region of Western Australia and is targeting major
gold-copper discoveries.
- The exploration work completed in 2021 to date has identified
three magnetic bullseye targets hosted within the Wallal Project
held by FDR Australia.
- In Power Metal's view the Wallal Project offers potential for
large scale gold-copper discoveries, supported by the geological
and geophysical similarities to Greatland Gold's Havieron project,
also located within the Paterson province.
- 2D seismic reprocessing work and a passive seismic survey are
underway, the results from which will further assist preparations
for a planned drill programme for which co-funding has been secured
of up to A$165,000 as part of the Western Australia Department of
Mines, Industry Regulation and Safety's Exploration Incentive
Scheme (EIS). The Company would like to formally acknowledge and
thank the State government for their support.
The Key Agreement Terms
- With this acquisition Power Metal secures a 100% interest in
FDR Australia. (Note: Power Metal previously announced a
conditional acquisition agreement on 28.04.21 which on completion
would have led to Power Metal holding a 75% effective interest in
FDR Australia. This agreement has been superceded and Power Metal
has now signed a revised agreement to acquire a 100% interest in
FDR Australia, subject to the revised consideration terms outlined
below.)
- FDR Australia will be acquired outright by First Development
Resources Limited, a UK company and wholly owned subsidiary of
Power Metal (FDR UK).
- Power Metal will fund the transaction on behalf of FDR UK by
paying two main batches of consideration as follows:
Initial Consideration for the 100% acquisition of FDR Australia
and the Wallal Main licence currently held within FDR Australia of:
13,333,333 Power Metal new ordinary shares of 0.1p each ("Ordinary
Shares") at an issue price of 2.75p and 13,333,333 warrants to
acquire new Ordinary Shares at an exercise price of 4.5p.
Additional Consideration for the 100% acquisition of all other
FDR Australia interests (granted licences and a licence application
currently held by third parties to be transferred into FDR
Australia under the Agreement) of: 10,000,000 Power Metal shares at
an issue price of 3.2p and 10,000,000 warrants to acquire new
Ordinary Shares at an exercise price of 5.0p.
- Full acquisition terms are outlined below.
Next Steps
- FDR UK is planning to list on the London capital markets in Q1 2022.
- FDR UK is in late stage discussions to expand its project
portfolio in preparation for listing, including new uranium and
rare-earth element project interests as well as additional
precious, base and strategic metal opportunities.
Paul Johnson Chief Executive Officer of Power Metal Resources
plc commented:
"Today marks an important day for Power Metal as we have
completed an unconditional agreement to acquire FDR Australia with
its unique portfolio of projects in the Paterson region of Western
Australia.
We have undertaken important work in 2021 which focused mainly
on the Wallal project where three magnetic bulleyes anomalies have
been identified which we consider to be prospective for large scale
gold-copper discoveries. That work has increasingly strengthened
our belief in the Wallal project's potential which has led to our
decision to acquire FDR Australia outright.
Power Metal has now begun preparations for a planned drill
programme at Wallal targeting the Eastern and Border anomalies.
Alongside this we are undertaking corporate work to secure a
listing of the ultimate holding company FDR UK on the London
capital markets.
There will be further announcements as we move FDR UK forward
from both exploration and corporate perspectives."
FDR AUSTRALIA REVISED 100% ACQUISITION TERMS
FDR UK will acquire the entire share capital of FDR Australia
and all FDR Australia interests. The vendors of FDR Australia are
the existing shareholders (the "Vendors").
Initial Consideration
For the acquisition of the entire share capital of FDR Australia
and its current sole granted licence E45/5816 (Wallal Main) Power
Metal will pay initial consideration of A$66,000 in cash and
GBP366,667 payable through issue to the Vendors of 13,333,333 new
Power Metal Ordinary Shares of 0.1p ("new Ordinary Shares") at an
issue price of 2.75 pence per share ("Initial Consideration
Shares").
(Note: The A$66,000 cash will be used to eliminate all
shareholder loans in FDR Australia leaving no liabilities as at the
Agreement date. For the quarter ended 30.9.21 the FDR Australia
Unaudited Profit and Loss Statement shows a loss of A$3,664 and as
at 30.9.21 Accumulated Losses of A$29,229. The Accumulated Losses
and any subsequent costs to the Agreement date will be eliminated
as described above).
In addition, Power Metal will issue the Vendors 13,333,333 Power
Metal warrants with an exercise price of 4.5p per new Ordinary
Share and life to expiry of 3 years from the date of issue
("Initial Consideration Warrants"). Should the volume weighted
average price ("VWAP") of Power Metal shares meet or exceed 7.0
(seven) pence for a 5 consecutive trading days Power Metal may
serve notice on the Vendors providing 10 trading days to exercise
and pay for the Initial Consideration Warrants or the Initial
Consideration Warrants will be cancelled.
Additional Consideration
For the acquisition of all other FDR interests (with the
exception of Ripon Hills Project - E45/5088 - an option over which
is outlined below) Power Metal will pay additional consideration of
GBP320,000 through the issue of 10,000,000 new Ordinary Shares at
an issue price of 3.2p each ("Additional Consideration
Shares").
In addition Power Metal will issue the Vendors 10,000,000
warrants with an exercise price of 5p per new Ordinary Share and
life to expiry of 3 years from the date of issue ("Additional
Consideration Warrants"). Should the VWAP of Power Metal shares
meet or exceed 10.0 (ten) pence for a 5 consecutive trading days
Power Metal may serve notice on the Vendors providing 10 trading
days to exercise and pay for the Additional Consideration Warrants
or the Additional Consideration Warrants will be cancelled.
Ripon Hills E45/5088 Option
FDR UK may, at any time within 12 months of the date of signing
of this Agreement, acquire E45/5088 (the Ripon Hills project) with
consideration comprising a payment of A$20,000 (to be paid as
398,036 Power Metal Ordinary Shares at an issue price of 2.75p and
398,036 Power Metal warrants at an exercise price of 4.5p and on
the same basis as the Initial Consideration Warrants above) to
Great Sandy Pty Limited ("Great Sandy"), current holder of the
licence. Upon witten notice of exercise and payment, Great Sandy
will transfer E45/5088 to RH Resources Pty Ltd (which will become a
wholly owned subsidiary of FDR Australia).
Royalty
The Vendors will retain a 2% net smelter royalty ("NSR") over
all licences included in this transaction and FDR UK will have the
right to purchase 1% of this NSR for A$1,000,000.
PATERSON REGION PROJECTS - BACKGROUND
FDR Australia holds the following project interests:
Wallal Project (Wallal Main-E45/5816 (390km(2) - granted),
Wallal West 1-E45/5853 (96km(2) - granted) and Wallal West 2 -
E45/5880 (86km(2) - granted)
A comprehensive historic desktop study completed by the Company
over the Wallal Project identified three prospective bullseye
magnetic targets. These include the Western, Eastern and Border
anomalies which have estimated dimensions of 5km x 5km, 2.5km x
2.5km and 1km x 1km respectively.
Further analysis determined that the Eastern and Border
anomalies are located at depths more similar to Greatland Gold's
Havieron discovery, which was discovered by blind drilling a
magetic bullseye anomaly through 420m of post-mineral sedimentary
cover. The latest exploration update focused on the Wallal Project
and released by the Company on 13 September 2021 may be viewed
through the following link:
https://www.londonstockexchange.com/news-article/POW/fdr-australia-paterson-region-exploration-update/15132674
Braeside West Project (137km(2) - one licence application)
In-depth historic desktop analysis is currently underway on the
Braeside West Project. A recent base-metal discovery was made by
neighbouring company Rumble Resources, which enhances the overall
prospectively within the Braeside West Project as it is hosted
within a similar geological environment to that of Rumble Resources
discovery.
Ripon Hills Project (42km(2) - one granted licence).
The Ripon Hills Project is prospective for base metal and gold
mineralisation associated with deep-seated north-south oriented
fault structures which run through the Ripon Hills Project.
In-depth historic desktop analysis is currently underway over the
Project.
ADMISSION AND TOTAL VOTING RIGHTS
Application will be made for the 23,333,333 Initial and
Additional Consideration Shares to be admitted to trading on AIM
which is expected to occur on or around 8 November 2021
("Admission"). The Initial and Additional Shares will rank pari
passu in all respects with the ordinary shares of the Company
currently traded on AIM.
Following Admission, the Company's issued share capital will
comprise 1,293,721,067 ordinary shares of 0.1p each. This number
will represent the total voting rights in the Company and may be
used by shareholders as the denominator for the calculation by
which they can determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the Financial Conduct Authority's Disclosure and Transparency
Rules.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
For further information please visit
https://www.powermetalresources.com/ or contact:
Power Metal Resources plc
Paul Johnson (Chief Executive Officer) +44 (0) 7766 465 617
SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat/Charlie Bouverat +44 (0) 20 3470 0470
SI Capital Limited (Joint Broker)
Nick Emerson +44 (0) 1483 413 500
First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson +44 (0) 20 7330 1883
NOTES TO EDITORS
Power Metal Resources plc - Background
Power Metal Resources plc (LON:POW) is an AIM listed metals
exploration company which finances and manages global resource
projects and is seeking large scale metal discoveries.
The Company has a principal focus on opportunities offering
district scale potential across a global portfolio including
precious, base and strategic metal exploration in North America,
Africa and Australia.
Project interests range from early-stage greenfield exploration
to later-stage prospects currently subject to drill programmes.
Power Metal will develop projects internally or through
strategic joint ventures until a project becomes ready for disposal
through outright sale or separate listing on a recognised stock
exchange thereby crystallising the value generated from our
internal exploration and development work.
Value generated through disposals will be deployed internally to
drive the Company's growth or may be returned to shareholders
through share buy backs, dividends or in-specie distributions of
assets.
Power Metal Exploration Programmes Underway/Results Awaited
Power Metal now has the following exploration completed with
results awaited or exploration underway:
- Silver Peak Project (Canada) - diamond drill programme
completed targeting high-grade silver (laboratory assay results
awaited)
- Authier North Lithium Project (Canada) - soil & rock
sampling completed (laboratory assay results awaited)
- Athabasca Uranium (Canada) - Phase I exploration commenced and
field results, together with laboratory assay testing of samples
collected, awaited.
- Tati Gold/Nickel Project (Botswana) - reverse circulation
drilling completed (field results, together laboratory assay
results awaited)
- Molopo Farms Complex (Botswana) - further samples being tested
for nickel sulphide and platinum group elements ("PGEs") from
diamond drill programme completed (laboratory assay results
awaited)
- Ditau Project (Botswana) - preparatory exploration work
underway on target I10 leading to planned accelerated drilling
targeting rare earth elements and base metals
- Kalahari Copper Belt (Botswana) - results from ongoing
exploration across the South Ghanzi Project and further exploration
at the more recently acquired South Ghanzi Extension and Mamuno
licence areas
- Wallal Gold/Copper Project (Australia) - geophysics results
from 2D seismic processing and passive seismic awaited
- Victoria Goldfields (Australia) - results from ongoing
exploration across 848km(2) of granted exploration licences
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END
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